Delta Variant Threatens More Reopenings, Junk Bond Yields Remain Low, and Tech Crack Downs Threaten Chinese Market
July 26, 2021 | FIRESIDE CHARTS
The Delta variant could put a wrench in “normalization” as many businesses plan to return to their office this fall with ~100 million eligible people still not vaccinated. But the flash Markit PMI report shows manufacturing continues its factory growth this month while the Services PMI printed well off its recent highs—and below many forecasts. Meanwhile, apartment listing estimates have skyrocketed— could the high-frequency measures show that inflation will accelerate? Junk bonds remain at record lows, continuing their historic run of being below the rate of inflation on the CPI. Fighting through, the USD is still hovering near its strongest level since April, making American commodities more expensive abroad. Looking to Asia, crackdowns in Beijing on education and tech have forced many companies to become non-profit, which has created a drag on the markets in mainland China.
- Businesses are NOT back to “normal”. Many are set to return this fall but will the Delta variant derail these plans?
Source: The Daily Shot, from 7/26/21
2. While manufacturing plowed ahead…
Source: The Daily Shot, from 7/26/21
3. Services, about 70% of the economy, fell back to more sustainable levels:
Source: The Daily Shot, from 7/26/21
4. More evidence that the largest component of CPI is, well, deflated?
Source: Arbor Research & Trading, from 7/26/21
5. Did the USD put in a double/triple bottom? It is trying to fight through resistance:
Source: The Chart Store, from 7/26/21
6. USD strength should give commodities a headwind:
Source: The Chart Store, from 7/26/21
7. Drilling technology has advanced to the point that this historical reference may be meaningless. Portable rigs, horizontal and multi-directional drilling allow greater production with fewer rigs:
Source: The Chart Store, from 7/26/21
8. New restrictions on education, tech, and “for profit” businesses are putting significant pressure on the stock markets in Hong Kong and China:
Source: The Daily Shot, from 7/26/21
9. There are still ~100 million eligible but non-vaccinated Americans:
Source: The Daily Shot, from 7/26/21
10. The Delta variant is feasting on these ~100 million and has now caused the second highest number of infections to date:
Source: JHU CSSE, from 7/26/21
Disclosure: The charts and infographics contained in this blog are typically based on data obtained from 3rd parties and are believed to be accurate. The commentary included is the opinion of the author and subject to change at any time. Any reference to specific securities or investments are for illustrative purposes only and are not intended as investment advice nor are they a recommendation to take any action. Individual securities mentioned may be held in client accounts. Past performance is no guarantee of future results.